Commentary

V6.140 Liability of supplies and activities in the bloodstock sector

Part V6 Business by business

V6.140 Liability of supplies and activities in the bloodstock sector

Bloodstock

V6.140 Liability of supplies and activities in the bloodstock sector

Introduction to the bloodstock sector

The bloodstock industry faces a number of VAT challenges and peculiarities. It is also affected by several administrative agreements entered into between industry representatives and HMRC which are published in Notice 700/57/20. Particular challenges can arise from the international nature of the sector with horses often moving around key racing countries. This paragraph considers the liability of supplies typically made by a number of different types of person in the sector. As part of this, it also considers when the ownership of bloodstock will be seen as a business activity for VAT and place of supply considerations which are pertinent to the sector. V6.141 looks at VAT recovery in respect of bloodstock and other practical points for those who own and deal with bloodstock.

Business/non-business and the bloodstock sector

Business activities and the Owners' Scheme

At one time, HMRC regarded ownership of racehorses as a non-business activity. This position resulted in a number of complications for the sector as well as a number of important VAT cases such as Triangle Thoroughbreds Ltd (1990) VAT Decision 5404; Mowbray Properties Ltd (1991) VAT Decision 6033 and Rykneld Thoroughbred Co Ltd (1992) VAT Decision 6894.

In response to the historic difficulties in establishing whether a racehorse owner has a business activity, a Memorandum of Understanding was agreed between HMRC and bloodstock industry representatives which was effective from 16 March 1993 and updated with effect from 1 January 1998.

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